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WHAT COULD MAKE<br />
ONSHORE SUB-SAHARAN<br />
AFRICAN DOMICILES<br />
MORE VIABLE?<br />
Respondents were asked to participate in a forced-weighting<br />
exercise to identify the most important factors they look for<br />
when considering any given fund domicile. Each respondent<br />
was given 100 points to allocate toward eight factors, with<br />
a greater number <strong>of</strong> points being allocated to the factors<br />
having greatest importance. While sentiment by firm type<br />
differs, there is a general consensus on what is important in<br />
a fund domicile: a sound legal and regulatory environment,<br />
tax competitiveness and political stability are the key<br />
drivers, followed by the availability, efficiency and cost<br />
competitiveness <strong>of</strong> support services, and the availability <strong>of</strong><br />
skilled human capital.<br />
SPOTLIGHT: WHAT CONSTITUTES A SOUND LEGAL AND REGULATORY ENVIRONMENT?<br />
While intuitively the rule <strong>of</strong> law is a cornerstone for investors the world over, private equity funds<br />
have specific requirements if their investments are to be optimised. EMPEA’s Legal & Regulatory<br />
Council—composed <strong>of</strong> legal experts and practitioners—developed a set <strong>of</strong> 10 Guidelines as a<br />
general framework to foster constructive dialogue amongst policymakers, regulators and investor<br />
who seek to promote private equity investment in emerging markets.<br />
The EMPEA Guidelines are intended to identify those elements <strong>of</strong> legal and tax regimes that<br />
experience from other markets has demonstrated will help attract robust international and local<br />
private equity investment. While the Guidelines contain important details and nuance, in broad<br />
terms they suggest a legal and regulatory environment that provides:<br />
1. Effective, clear and flexible corporate and securities laws, with the ability to negotiate rights in<br />
capital structures<br />
2. Conformity to international standards <strong>of</strong> business integrity and anti-corruption<br />
3. Clear, consistent and internationally competitive taxation<br />
4. Reliable and consistent approach to dispute resolution and enforcement<br />
5. Non-discriminatory treatment <strong>of</strong> cross-border investment<br />
6. Efficient, transparent and fair regulatory environment<br />
7. Transparent and reliable rules for state expropriation<br />
8. Stable and fair framework for property rights<br />
9. Flexibility in insolvency proceedings and fairness for stakeholders<br />
10. Ability to contract freely, with minimum prescription by statute<br />
For more information, please download a copy <strong>of</strong> the EMPEA Guidelines at<br />
www.empea.org/resources/empea-guidelines.<br />
<strong>Conduits</strong> <strong>of</strong> <strong>Capital</strong> – Onshore Financial Centres and Their Relevance to African Private Equity<br />
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